The use of Account Freezing Orders by investigating authorities is ever increasing. Introduced by the Criminal Finances Act 2017 (which came into force in 2018), Account Freezing Orders are obtained at magistrates’ court. They are often obtained without notice to either account holders or interested parties who discover the outcome much later.
The threshold for the court on an application for an Account Freezing Order is a low one: Account Freezing Orders are frequently granted upon the sworn assertion that balances of bank accounts are suspected to be ‘recoverable property’ which means that the funds are either suspected to be the proceeds of crime or suspected to be intended to be used in unlawful conduct.
Benjamin Waidhofer was instructed by Naureen Shariff, of the Serious Fraud and White Collar Crime team at Blackfords LLP to discharge an Account Freezing Order (AFO) obtained by HMRC at an ex-parte hearing in respect of an account containing over £75,000 which had been granted at Ipswich Magistrates’ Court.
Shortly after being instructed, Benjamin drafted a detailed document inviting HMRC to discharge the Account Freezing Order on the basis that assertions made by HMRC were provably inaccurate and that the only proper inferences to be drawn from the material in question pointed away from the assertions that had been made to the Court. Benjamin was also able to demonstrate that each and every penny held within the account in question had been derived from an equity release mortgage rather than the proceeds of crime, as had been alleged.
Within a matter of days, HMRC agreed that the order should be set aside without the need for protracted legal proceedings and HMRC themselves undertook to make a formal application to the Court, in order to discharge the Account Freezing Order in question. On 22 June 2021, at Ipswich Magistrates’ Court, the Account Freezing Order was set aside the account holder obtained unfettered access to their bank account once again.
It is believed that this is the very first time HMRC themselves have taken the initiative to set aside an Account Freezing Order they had previously obtained at an ex-parte hearing.
Account Freezing Orders are founded upon mere suspicion rather than evidence which means they are relatively easy for investigating authorities to obtain at the magistrates’ court. Account Freezing Order proceedings can take years to resolve and this case demonstrates the necessity to take a proactive approach. Swift engagement can make all the difference, particularly in cases where the provenance of funds can be demonstrated with ease.
Benjamin Waidhofer is frequently instructed to advise and represent both individuals and corporates in both criminal and civil asset forfeiture proceedings. He has set aside and or resisted numerous Account Freezing Orders over the past 2 years against HMRC and the police. He has been able to obtain costs orders against investigating authorities and is highly sought after in this area of law. Any queries about this matter, or any other, ought to be addressed to clerks@foundrychambers.com.